KAM CEOs Brief | October 1 2016

Kenya Power Engages KAM Central Kenya and Nyanza/Western Chapters

Kenya Power engaged KAM Central Kenya and Nyanza/Western Chapter on September 27 and September 30 2016 respectively. Among the power issues cited by manufacturers in the two regions include Power fluctuations and unplanned outages, tedious damage claim process for damaged machinery, estimates on power units used and the need for alternative power lines. Kenya Power encouraged members to utilise WhatsApp groups for ease of communication and to ensure that customers are able to effectively manage power disruptions. Kenya Power updated manufacturers of its plan on monitoring power supply and fluctuations in the substations.

Kenya Mining Forum Held

KAM participated in the Kenya Mining Forum on 28 – 29 September 2016 in Nairobi. The Forum showcased Kenya’s ‘open for business’ potential and focused on specific delegate profiles with a distinct end goal – the search for credible investors in Kenya’s mining industry, as well as associated support services. Supported by case studies and presentations, growth strategies and market data, the inaugural edition of Kenya Mining Forum showcased the country as an emerging destination for mining. Discussions with the Ministry of Mining and key stakeholders in the region highlighted the fact that is an opportune time to promote investment in Kenya as they recently approve the Mining Act in May 2016, providing more transparency and credibility for investors. Moreover, Kenya has been working with McKinsey on a 20-year mining plan that already highlighted a potential of USD 62.4b mining revenues. This is going towards the objective to contribute to 10% of the GDP in 2030 against 1% in 2015.

Kenya Industrial Water Alliance Launched

Kenya Industrial Water Alliance (KIWA) was officially Launched on 29 September 2016 by Ministry of Water and Irrigation Cabinet Secretary, Eugene Wamalwa. KIWA is established to collectively address water-related risks Spearheaded by Kenya Association of Manufacturers (KAM) and the Water Resources Management Authority (WRMA), and supported by the International Water Stewardship Programme and the 2030 Water Resources Group. The Alliance is a Partnership of public, private and civil society organisations committed to socially acceptable, economically favourable and environmentally sustainable management of water resources in Kenya. KAM CEO, Ms. Phyllis Wakiaga is the Chair of the Alliance whereas Agatha Thuita of WRMA is the Vice Chair.

ACA Destroys Counterfeits in Mombasa

Anti-Counterfeit Agency (ACA) destroyed counterfeits goods worth KES 7 Million on 21st September 2016 in Mombasa.

Since inception of the Agency in June 2010, the Agency has received and investigated over 1,000 complaints on intellectual property rights infringements. These investigations resulted from seizures of a wide range of counterfeit goods with a street value of over Ksh 1.2 Billion.

The Agency has successfully won over 200 cases in the courts and goods worth over half a billion have so far been destroyed. They included electronics, electrical goods, hardware, computer accessories, clothing, tobacco products, cosmetics/detergents, petroleum products, vehicle spare parts, food products, stationery, alcoholic beverages, medicine, and agricultural inputs, cosmetics/detergents, petroleum products, vehicle spare parts, food products, stationery, alcoholic beverages, medicine, and agricultural inputs.

KAM CEO and ACA interim Chair, Ms Phyllis Wakiaga stated that, “Manufacturers need a place where brands are firmly protected within the Kenyan economic policy and law, a Kenya which provides the environment for brand growth and a country where we stop the trade in counterfeits. By combating trade in counterfeits, we can be sure that our economy will grow; we will create jobs and encourage foreign direct investors into the country.”

Through stakeholder consultative meetings, ACA sought ways to review the regulations and penalties under the Anti-counterfeit Act of 2008. This led to the Statute Law (Miscellaneous Amendments) Bill, 2014 passed by the National Assembly and assented to by the President of the Republic of Kenya thereby bringing the amendment to the Anti-Counterfeit Act into force. The Bill effectively amended sections of the Anti-Counterfeit Act that made it harder for the trade in counterfeits to thrive.

With regard to the amendments of Anti-Counterfeit Act, a very important insertion was made on Section 34A. This section will allow ACA to dispose of criminal cases efficiently and expeditiously while expending significantly less time and energy to otherwise long and tedious processes in the criminal justice system. We shall continue to review the Act periodically together with our stakeholders to make it more prohibitive.

EGMS Mobile App Stakeholders Sensitization Forum

KAM participated in the EGMS Mobile App Stakeholders Sensitisation Forum organised by Kenya Revenue Authority (KRA) on 28 September 2016 in Nairobi.The aim of the forum was to call for support and collaboration with like-minded institutions such as KAM in order to curb illicit trade and safeguard the health of the innocent consumers. KRA has realised that there is prevalent excisable goods in the market whose origin cannot be traced and some of these were not meeting the right standards. In order to address this problem, KRA came up with a Smartphone Application for Verification of Excisable Goods in an effort to curb illicit alcoholic drinks and tobacco products.

The application is a system that enables KRA to:

• Control and Monitor Production of excisable goods on real time basis
• Forecast Revenue
• Verify and authenticate products sold in the market
• Monitor and control field inspectors
• Facilitate the Public to authenticate products hence protection of Consumers and Government Revenue

This is intended to help the manufacturers and importers of tobacco brands and spirit products to combat illicit trade and expand their market share. The system extends the enforcement to the general public, retailers and wholesalers by ensuring there is consistent tracking of goods across the distribution chain.

The New Generation Stamp has 4 security Layers that enables:

• Authentication through lab Forensics
• Authentication by Distributors and Retailers
• Authentication by the KRA field Inspectors
• Public Authentication

The system ensures a safe environment in the beverage market, a clean business environment that is safe from illegal competition and boosts revenue mobilisation, which is key for Government key operations. It is the responsibility of the general public/ citizens to support KRA in collection of revenues using this system as they as well stand to gain by being protected from the consumption of harmful/ illicit products by the same system.

Stakeholder Meeting on Implementation of Provisions Requiring Importers to Insure with Local Insurers on Marine Cargo Held

KAM participated in a stakeholder meeting on Implementation Of Provisions Requiring Importers To Insure With Local Insurers On Marine Cargo on 27 September 2016 at Kenya Revenue Authority (KRA).

Section 20 of the Insurance Act, requires that no insurer, broker, agent or other person shall directly or indirectly place any Kenya business other than reinsurance business with an insurer not registered under the Act without the prior approval, whether individually or generally, in writing of the Commissioner. The only exemptions provided to the requirements are if, the business is under treaty reinsurance or facultative reinsurance.

The section provisions are mandatory and therefore creates an offence for contravening the provisions of the section. It provides that a person shall be liable to a fine not exceeding ten thousand shillings or to imprisonment not exceeding one year or to both.

The said provisions have not been in operation since its enactment and it was only during the reading of the Budget Statement this year, when the Cabinet Secretary directed that the provision should be operationalised.

Following the Directive, an announcement was made at a stakeholder meeting by Mrs. Nancy Karigithu, the Principal Secretary of the State Department of Maritime and Shipping Affairs in the Ministry of Transport, Infrastructure, Housing and Urban Development and Mr. Sammy Mutua, Commissioner of Insurance Regulatory Authority, stating that the provisions will come into full effect on 1st January 2017. In addition, the provisions will be deemed to have come into operation from 1st September 2016. The three months period allow for compliance.

Also present at the meeting was the Commissioner of the Kenya Revenue Authority (KRA), Mr. John Njiraini, who indicated that KRA would ensure full compliance with the law. The implementation of the provision for KRA would ensure localisation of maritime insurance which he observed had been dominated by international insurance players; assist in identifying persons evading tax; and ensure monitoring of on-shore cargo to ensure public security. All concerned stakeholders especially importers are now required to comply with the provisions before the effective date next year.